Strong recovery in rupee adds to momentum, say traders
Equity indices made an emphatic comeback on Friday after falling for seven straight sessions after the RBI hiked interest rates by 50 basis points on expected lines and projected inflation coming under control from January next year.
A strong recovery in the rupee added to the momentum, traders said.
Overcoming a wobbly start, the 30-share BSE Sensex soared 1016.96 points or 1.80 per cent to settle at 57426.92. During the day, it rallied 1312.67 points or 2.32 per cent to 57,722.63.
Similarly, the broader NSE Nifty climbed 276.25 points or 1.64 per cent to end at 17094.35.
Bharti Airtel topped the Sensex gainers’ list with a jump of 4.49 per cent, followed by IndusInd Bank, Bajaj Finance, Kotak Mahindra Bank, Titan, HDFC Bank, Bajaj Finserv and Tata Steel.
“The 50 bps rate hike by the RBI in today’s meeting was in line with expectations. The key highlights were the resilience shown by the Indian economy considering the turbulent global environment and concerns emanating from global growth slowdown and hawkish stances of various central banks,” said Santosh Meena, head of research at Swastika Investmart Ltd.
Das on Friday said currency movements are not the guiding factors for monetary policy decisions.
He said currency management is the domain of the RBI and that it will deploy all the appropriate measures on the same.
The MPC takes into account domestic factors on inflation and growth while formulating its rates strategy, Das told reporters during the customary post-policy press conference.
He said the primacy is given to inflation while the aspect of growth is also looked into by MPC.